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I went back and listened to the Shareholder meeting again. Some quotes from EM regarding production of the truck and semi:

- "A lot of this is based on our ability to manufacture a lot of cells and make a lot of battery packs."

- "There's not much point in adding product complexity if we don't have enough batteries ... then it's complexity without gain."

"Adding product complexity" in this context means rolling out new models.

So, my question to the group is, "where are we going to get the extra battery capacity?" EM has already stated that the Y market is bigger than the 3/s/x combined. China will suck up as many cars as we can make for years to come. If, If robotaxi is on track we need every battery we can produce for the next ten years to build out that platform.

New products are to expand our market in case there is not enough demand for the batteries we currently produce. If they announce (and start taking orders for) the truck then I think that means the FSD program is not making good progress. Aren't we already cannibalizing power to make more cars?

Notwithstanding what I just said, I now think they'll go ahead with the semi. Maybe just a lot slower than people think. Reservations have already been taken and a lot of work already completed. I think it's a great product, in a great market, that Elon really wants to serve.

I wouldn't hold your breath for an autonomous semi though. Uber fought the taxi fight against a disorganized and disliked group of companies. The Teamsters might not be as agreeable when it comes to them losing their jobs. Also, a true autonomous semi doesn't need a cab.

The Roadster 2 will just get delayed.

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Once again you forgot to quote all of Elon. In particular the part where Elon, JB and the other guy on stage said they’ve got a plan for battery expansion (as they looked at each other with smirks on their faces like they had a really big secret).

It's clear there is a bigger picture, the combined puzzle pieces of value that couldn't be obtained by anyone else other than Tesla with Maxwell. Maxwell understood this as well and agreed to the terms of sale after some negotiations.

"We are very excited with today's announcement that Tesla has agreed to acquire Maxwell. Tesla is a well-respected and world-class innovator that shares a common goal of building a more sustainable future," said Dr. Franz Fink, President and Chief Executive Officer of Maxwell. "We believe this transaction is in the best interests of Maxwell stockholders and offers investors the opportunity to participate in Tesla's mission of accelerating the advent of sustainable transport and energy."​

Yes, Maxwell's Board gets (got) it. They're excited to be a part of this plan. ICE-Busters!

Tesla was working with Maxwell for some time in advance of deciding to buy the company. Obviously they liked what they saw, and saw that there were directions that Maxwell could go in that would be advantageous for Tesla, but Maxwell didn't have access to the kind of resources that Tesla had. Cash is only one resource. Access to Grohmann is another. It's also possible that Elon or JB or another battery-literate genius at Tesla thought of something that even Maxwell hadn't thought of.

"How come the rest of the world...?". How many people in the world were really in a position to evaluate Maxwell's technology? Excluding the ones who work at Tesla, not all that many. And where do they all work? Mostly at Japanese, Chinese and South Korean companies, but not as top management, instead buried layers-deep in bureaucracies.

Here's a story that happened in real life that illustrates the kind of thinking. I worked at one of the largest cellphone chip manufacturing companies doing security research, Qualcomm. We identified a company doing top class security hardware, which had the capability to ensure that only we could turn on functionality in our chips. Being Fabless, most of our chips were made in Taiwan or South Korea, and we had the problem that there were a lot of phone handsets with chips in them that looked a lot like our chips but were never appearing on our royalty reports. This company's technology would make sure that no usable chips fell off the back of the fab production lines. At first we licensed the technology, for numbers in the millions per year. I championed the effort to instead buy the company, which had other intellectual property we could use too, but I had enormous difficulty getting the idea through to top management. I kept trying and eventually got approval at CEO level to offer a certain amount (couple hundred million), but the lawyer in the finance department had to do the negotiation. Every few weeks I'd talk to the CEO at the target company and he'd tell me that he had heard nothing from us. Then one day he stopped taking/returning phone calls, because (as we later found out) he had done a handshake deal at a lower price with another company, and they had a two-month no-shop provision. Anyway, we lost the deal, and it's been enormously effective for the company that did it instead. It's really hard for "just an engineer" to get management to correctly value something that is of long term benefit but doesn't fit the existing model in the short term. Anyway, this is just my sour grapes at this point, part of the reason I left.

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Thanks for posting this. It's an excellent and classical description of how the tail is wagging the dog in Corporate America. Executives and lawyers make critical decisions in willful ignorance, even when they are given proper information from technical people about the potentially critical value of a particular piece of IP. It's simply too much a basic part of American corporate culture, perhaps with just a few exceptions. Apple perhaps until recently, Tesla, currently, and perhaps a few other companies where technical people are completely integrated into as opposed to isolated from the core executive and decision-making processes. As Tech companies become more successful and the executive group often times becomes more grandiose, greedy and often times even more character disordered, and thus less responsive to learning what they don't know from people they regard as dispensable underlings, these kinds of mistakes become more commonplace.

The good news is the Tesla does not seem to be making these kinds of mistakes. Hard to tell from a distance, and the turnover in their executive group always raises a lot of questions about what in fact is going on on the inside, and Elon's tweets of course often need to have a net thrown over them, but in terms of technically critical acquisitions and supply chain decisions, Tesla looks solid. And the Model Y is clearly poised to be a screaming 600-foot home run in a fashion that will only consolidate Tesla's massive lead in EV technology.

But is Maxwell really the only company/only researchers to have gone in this direction? Is there really no competition? It’s not like the rest of the world stopped working on battery improvements in the mean time. What have others accomplished in that time?

Is it a given that the Maxwell tech will be successfully integrated into Tesla battery lines/packs in, say, the next 6 months?

I saw someone ask here, if this Maxwell tech was so short term and mind-blowing, how come the rest of the world just let Tesla have it?

Even supposing all this plays out in Tesla’s favor, will Tesla keep that IP private while giving the rest of their patents away?

I know there’s a lot of promise here, I’m just wondering if it’s as amazing and as close to fruition and will give as much of a lead over competitors as some seem to claim. It wouldn’t surprise me at all if everyone’s batteries improved over the next year, but will Tesla outpace the rest by a substantial margin?

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good question
And why isn't GM building a competitor to Model S? Cadillac could have used the sales, no? BEV or PHEV??
And why isn't GM making a Model X killer? BEV or Hybrid without Falcon Wing Doors?
And why isn't GM making a battery factory?
AND what about Ford? Same questions.

I probably get down voted for this, but one thing people need to consider is the price Tesla paid for Maxwell. Say about 200-250M. That's really not a lot. Suggests to me that Maxwell tech is not some holy grail.

But it is obviously important to some extent to Tesla's strategy. And what exactly that is remains to be seen.

I think everybody (like Galileo Russell) going on about how Maxwell is going to transform Tesla is maybe reaching a bit. Personally I'm taking a wait and see attitude. If Maxwell really was some revolutionary breakthrough tech, there would have been a major bidding war and it's price would have been over 1 billion, considering how important battery tech is to a future trillion dollar auto industry. Either that, or everybody else, including Maxwell, is not seeing what only Tesla is seeing -- a distinct (but unlikely) possibility. Let's see what happens...

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Maxwell's dry electrode coating is not some new thing - they've tried to get battery companies to use it for more than a decade. In 2008 they collaborated with Johnson Controls/Saft to put Maxwell's dry-coated electrodes into HEV batteries. The article mentions a 2007 deal with Tianjim Lishen which also included making batteries with DBE. DOE funded a project in 2011.

Enthusiasts like Galli are hyperventilating, but It'll be a while before we know if DBE is useful to Tesla or just another Silevo.

Enthusiasts like Galli are hyperventilating, but It'll be a while before we know if DBE is useful to Tesla or just another Silevo.

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If Tesla is the partner Maxwell was working with, they already know. Further, their lab results show a 20% energy density improvement which Tesla would have already validated via Jeff's accelerated life testing.

Maxwell's dry electrode coating is not some new thing - they've tried to get battery companies to use it for more than a decade. In 2008 they collaborated with Johnson Controls/Saft to put Maxwell's dry-coated electrodes into HEV batteries. The article mentions a 2007 deal with Tianjim Lishen which also included making batteries with DBE. DOE funded a project in 2011.

Enthusiasts like Galli are hyperventilating, but It'll be a while before we know if DBE is useful to Tesla or just another Silevo.

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You must be kidding! So Tesla spent a quarter of a billion dollars to experiment with something that they're not 100% convinced is going to be critical to improving their Battery Technology and throughput? That's about the strangest assertion I've ever heard. Quarter of a billion dollars just to experiment with this?. Even for Tesla that kind of money doesn't grow on trees, and the true scientific experimenting is long over and the results of those experiments are clearly visible to Tesla and that's why they moved in the direction that they did. Implementing a major change in production technology even if they're 100% convinced that's such a change is going to improve both battery functionality and throughput of the factory is another story. That may require a whole lot of trial-and-error pipe fitting so to speak, as well as capital Investments that may exceed 250 million to implement, but in terms of this technology being something that they're not sure they can use? That makes no sense.

I think there are several reasons to think Maxwell technology could be very close to rollout:

Maxwell has been working on this for a long time already

Tesla has been working with Maxwell since 2016.

The Maxwell manufacturing process is not a new lab demonstration only process. It is a commercial process that they already use in their ultra-capacitor factory in Arizona - Tesla now have staff already trained for mass production of electrodes using Maxwell's method.

The Maxwell technology does not require a new battery chemistry. This can initially be integrated into Tesla's existing battery chemistries - but of course, it opens up many doors to future chemistry developments.

Tesla has heavily hinted that they are close to taking battery cell production in-house. Although, this doesn't necessarily have to use Maxwell tech initially. Panasonic seems to be very confused why Tesla isn't giving them a contract for Model Y production - suggesting to me that Tesla has plans to manufacture Model Y cells itself.

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Precisely.
The machines pictured in the Maxwell website (before all mention of batteries was removed!) Are no doubt churning out batteries for test, and/or production, plus being replicated by either the original manufacturer, or Grohmann.

I fully expect these to be in production cars in Q1, maybe even sooner.

You must be kidding! So Tesla spent a quarter of a billion dollars to experiment with something that they're not 100% convinced is going to be critical to improving their Battery Technology and throughput? That's about the strangest assertion I've ever heard. Quarter of a billion dollars just to experiment with this?. Even for Tesla that kind of money doesn't grow on trees, and the experimenting is long over and the results of those experiments are clearly visible to Tesla and that's why they moved in the direction that they did. Implementing a major change in production technology even if they're 100% convinced is going to improve both battery functionality and throughput of the factory is another story. That may require a whole lot of trial-and-error pipe fitting so to speak, but in terms of this technology being something that they're not sure they can use? That makes no sense.

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They didn't spend anything. In fact, they acquired a bit of cash in this deal. They issued less than a million shares for a technology that might help them and a bunch of good R&D folk. Tech companies do this all the time.

They didn't spend anything. In fact, they acquired a bit of cash in this deal. They issued less than a million shares for a technology that might help them and a bunch of good R&D folk. Tech companies do this all the time.

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Just because the deal was structured in terms of stock doesn't mean assets didn't change hands. The notion that Tesla's willing to give out a boat load of stock when they have no hard scientific or technical evidence that they can actually use those patents is an absurd claim.

On January 18, 2019, a member of the Maxwell Board contacted a strategic partner with which Maxwell has had a commercial relationship for several years (“Company A”). The Maxwell Board member inquired whether Company A would be interested in an acquisition of Maxwell. Company A indicated that it remained highly interested in a strategic collaboration and partnership with Maxwell, but it was unlikely that Company A would be interested in acquiring Maxwell. The same member of the Maxwell Board also contacted two strategic partners in the automotive industry to inquire whether they would be interested in an acquisition of Maxwell (“Company B” and “Company F” respectively). Neither Company B nor Company F responded to the member of the Maxwell Board with any immediate interest in acquiring the Company.

From January 17 through January 22, 2019, pursuant to the Strategic Transaction Committee’s instructions, Barclays contacted ten other potential strategic parties, including Company C. Company C expressed to Barclays interest in a potential transaction and had a call with Maxwell’s management on January 21, 2019. On January 22, 2019, Company C notified Barclays that following the call with Maxwell’s management, they were not interested in pursuing a transaction with Maxwell. On the morning of January 23, 2019, Company D notified Barclays that they were not interested in a strategic transaction with Maxwell. On January 25, 2019, Company E e-mailed Barclays representatives and indicated that it was not interested in pursuing a transaction with Maxwell. The seven other strategic parties contacted by Barclays did not respond to Barclays’ outreach.

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My hunch is that potential acquirers looked at Maxwell's financials and thought that Maxwell was simply trying to save itself from bankruptcy, rather than realizing that Maxwell had game breaking technology with an offer in progress from Tesla. The acquisition was announced Feb 4th.

But is Maxwell really the only company/only researchers to have gone in this direction? Is there really no competition? It’s not like the rest of the world stopped working on battery improvements in the mean time. What have others accomplished in that time?

Is it a given that the Maxwell tech will be successfully integrated into Tesla battery lines/packs in, say, the next 6 months?

I saw someone ask here, if this Maxwell tech was so short term and mind-blowing, how come the rest of the world just let Tesla have it?

Even supposing all this plays out in Tesla’s favor, will Tesla keep that IP private while giving the rest of their patents away?

I know there’s a lot of promise here, I’m just wondering if it’s as amazing and as close to fruition and will give as much of a lead over competitors as some seem to claim. It wouldn’t surprise me at all if everyone’s batteries improved over the next year, but will Tesla outpace the rest by a substantial margin?

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The most important thing to remember is the oil companies are not going to sit by quietly and be put out of business. They have paid good money to stop research and development of alternative fuels, batteries, electric motors and even hemp.
Whatever Maxwell has, it was not noticed by the big oil.

But is Maxwell really the only company/only researchers to have gone in this direction? Is there really no competition? It’s not like the rest of the world stopped working on battery improvements in the mean time. What have others accomplished in that time?

Is it a given that the Maxwell tech will be successfully integrated into Tesla battery lines/packs in, say, the next 6 months?

I saw someone ask here, if this Maxwell tech was so short term and mind-blowing, how come the rest of the world just let Tesla have it?

Even supposing all this plays out in Tesla’s favor, will Tesla keep that IP private while giving the rest of their patents away?

I know there’s a lot of promise here, I’m just wondering if it’s as amazing and as close to fruition and will give as much of a lead over competitors as some seem to claim. It wouldn’t surprise me at all if everyone’s batteries improved over the next year, but will Tesla outpace the rest by a substantial margin?

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No other company even tries to stuff thousands of cells into a battery pack.

Most other companies build packs with 10-50 enormous cells using "prismatic" or "pouch" cells.

It is far easier to build big packs with fewer cells, but there are a bunch of compromises you end up making.

Imagine what's going on in a tesla factory where they're assembling 87,048 cars each with 3000 to 8000 cells at a rate of 35 packs an hour, just to stack the cells and attach them together to make the pack modules. No other company even tries.

The small cell architecture yields huge current in / out (tremendous performance and charging speed) and very precise management of the battery environment (hot for supercharging, warm for L2 charging, just-right for driving), you can change the shape of the skateboard to suit a particular platform's requirements without having to resort to "foot garages" or other absurdities).

Maxwell *may* allow for making cells without having to bake off whatever toxic/expensive solvents are currently used in gluing the lithium slurry to the plastic film that gets rolled up into the batteries, which would radically simplify the manufacturing process / expense. The resulting cells may also be more stable / durable.

Regardless of the Maxwell advantage, Tesla's "battery lead" is in manufacturing and battery management, and it is undeniable.

Please don't label Tesla a car manufacturer.
Tesla makes and sells technology, and just happens to make cars that use that technology. Technology includes software, battery cells/modules, custom circuit boards and other technology.
Nissan makes and sells cars/trucks, and struggles with 21st Century technology.
The 2019 Leaf (my wife drives one) remains a compact SUV. you push a button on the dash to start, push down on the lever to turn off the parking brake, then move the gear shift left and up for reverse, or left and pull back for drive. The climate control is the same on the dash as the 2013 Leaf we used to have. All the buttons and things to turn things on and off are the same as the 2013 Leaf.

If Tesla does produce produce its own cells (I think they will and soon) they may not be 2170 or 18650, they may not even be cylindrical.
Not because assembling and wiring thousands of cells is such a chore, it's something that lends itself to vision assisted robotics after all but because there are good technical reasons why another form factor might make more sense. Tesla originally went with 18650 cells because they were already being made by the million for lap top computers by a few few quality manufacturers at a commodity price. But cooling the cells is more difficult than say a thin pouch cell that has shorter thermal paths which could be liquid cooled easier and more effectively than cylindrical cells, even the small ones that Tesla currently uses.
I'm not saying Tesla will abandon cylindrical cells for pouch cells but the possibility is there. Once you control the manufacturing of the cells you can make them in any format that makes the most sense and that may not be as a cylinder.

good question
And why isn't GM building a competitor to Model S? Cadillac could have used the sales, no? BEV or PHEV??
And why isn't GM making a Model X killer? BEV or Hybrid without Falcon Wing Doors?
And why isn't GM making a battery factory?
AND what about Ford? Same questions.

You can buy it for $167,000 for all 3 parts of Munro's Model 3 report.

And which companies use cells vs pouches?? Only Tesla and Rivian? Is that correct??

And genius investors worry about Elon tweets - just ask the SEC which fined Elon/Tesla $40,000,000.

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The key problem for GM and a most of the rest of the industry is that they are not securing enough batteries. The US Big 3 automakers are not all that interested in making cars anymore. They are now small truck makers who also offer some cars.

The Big 3 are facing a Catch 22 with EVs. They don't have access to enough batteries to mass produce any EV right now and they are afraid of two things that could happen if they tried to mass produce EVs: 1) It would kill their ICE sales before they had enough batteries to replace ICE production, or 2) They go all in on current li-ion tech and there is a major breakthrough tomorrow that leaves them with older, unwanted, more expansive tech when competitors who held out for the new battery tech are raking in sales.

The EV market has two key limiters, one is a hard limit and the other is soft. The first limit is battery supply. Even Tesla is now facing scaling difficulties as mentioned up thread. Battery supply is expanding world-wide, but it's still only a tiny fraction of what's needed to convert EV production over.

The other, softer limit is consumer demand. Tesla is doing well, but other EVs sit on dealer's lots. In part because dealers don't know how and don't want to sell them. But the mainstream hasn't really flipped on EV demand yet. In places like California few people don't know about Tesla and what they're about, but get to Kansas and you'll find a lot of people scratching their heads and asking where the engine is. Get to the upper Midwest and you'll find hostility towards EVs because they're threatening their hometown industry.

Cites, please. I know plenty of oil folks. None of them are fans of selling gasoline - they'd all much rather sell NG - which is how most most EVs are powered...

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I literally have friends and family in or retired from the oil business. The oil companies are a lot less worried about EVs coming. As you point out, they can still sell natural gas and at least in North America we're nowhere near running out. I think they would prefer to sell oil though, it has more profit potential, but they also realize that the cheap to produce and refine oil is running out. The stuff that's left is heavier, requiring more refining, and/or very expensive to produce.

In North America we produce oil from existing fields with secondary recovery methods (which costs more per barrel), produce it from ever deeper waters offshore (which costs a lot to drill), or is produced from oil shale or tar sands (both require extra energy and effort to bring to market). Venezuela has a lot of oil, but it's heavy stuff that requires more refining. The Saudi light, sweet crude is running out, though the Saudis deny it.

The oil companies are largely run by the same short term thinkers plaguing most American corporations. As long as they see a path that keeps them in bonuses until they retire, they don't really care what happens next.

If EV demand went way up and ICE sales dropped, the oil companies know that the average age of cars in the US is 12 years. Even if battery production could meet demand, which it couldn't in that scenario today, it would be at least a decade until 1/2 the ICE were off the streets, and more realistically 2 decades. And that's just half the fleet.

In the medium term a shrinking oil market is fine for oil companies. They can quit exploration and developing new fields, which is their biggest expense by a huge margin and can just sell what they have. Because their biggest expense is gone, they rake in massive profits over pumping what's there. They know this is not a long term strategy, but it lasts until their retirement and that's all that concerns the corporate bosses.

The car companies are much more concerned about the rise of EVs. They could be facing extinction within 5-10 years if demand flips and ICE sales crash before they can get enough batteries. Because their culture farms out so much it doesn't occur to most car company execs to do what Tesla is doing securing their own supply of batteries. They are depending on just buying from someone else. That's going to prove a mistake when the crunch comes. Especially if battery makers decide to make EVs too, which is a high probability with LG.

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